CUPERTINO, Calif.--We're here at Apple's headquarters for the company's announcement of its iPhone software development kit. The event started just after 10 a.m. PT. What follows is a live blog of CEO Steve Jobs' speech, with updates as they come. (Editor's note: To make this blog more readable for posterity, we have since reordered this blog so that updates appear in the order in which they happened.)

10 a.m. PST: Apple's special event today in Cupertino is about to get started, as a couple hundred people are gathered inside Apple's Town Hall auditorium at its Cupertino, Calif., headquarters. We're waiting to hear how Apple plans to handle third-party application development for the iPhone, as well as to learn about new business-friendly features. Props to Apple this time around for the power strips, but come on guys, it's 2008. Wi-Fi is a proven technology.

10:01 a.m.: Steve Jobs enters--standard outfit. "We're really excited to share some great news with you about the iPhone software road map." He rattles off a few iPhone stats from the early days of the product, quoting the Canalys numbers for smartphone share in the United States, which puts the iPhone in second place, behind Research In Motion.

Steve Jobs addresses the crowd.
Corinne Schulze, CNET Networks

10:03 a.m.: Jobs is going to be joined on stage by Phil Schiller, senior vice president of marketing, and Scott Forstall, vice president of iPhone software. Schiller comes on stage to handle the enterprise portion of the conference.

10:04 a.m.: Schiller starts talking about the companies that have inquired about working with the iPhone, mentioning Genentech, where Apple board member Art Levinson is CEO. It's also been a university play, according to Schiller, bringing up Stanford University's deployment of the iPhone. He avoids mentioning Duke, which initially blamed the iPhone for a widespread network outage last year.

10:07 a.m.: So, what do businesses want? "Great e-mail integration," says Schiller. That also extends to calendars, contacts, and the global address lists of corporations--having that technology instantly accessible and pushed to the device. They also want security policies, like VPNs and remote wiping of a stolen iPhone, and configuration help. "I'm really excited to be the one to tell you today that we're doing all these things in the next release of the iPhone software."

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Click here for complete coverage of Apple's iPhone SDK announcements, which give the hot-shot gadget its entree into Corporate America and even the gaming world.

10:07 a.m.: What do they really want? Microsoft Exchange. And they're getting it: Schiller announces that Apple has licensed the Microsoft ActiveSync protocol, which will make it much easier to do push e-mail and contacts with Exchange servers.

10:08 a.m.: Schiller starts ripping on the BlackBerry, without actually mentioning it, of course. He's referring to the use of a NOC, or network network operations center, "which adds to risk and reliability, as we've seen from time to time." The crowd of CrackBerry enthusiasts chuckles.

10:10 a.m.: You'll soon get push e-mail, calendaring, contacts, and a global contacts list, as well as the remote-wipe security feature. The iPhone's Mail application will have this functionality; you won't have to have a new user interface for e-mail and calendars. This will ship with every iPhone.

10:13 a.m.: Schiller starts demoing the new features. He's using a virgin iPhone, demonstrating how you would activate the functionality with Exchange. You can do the whole thing over the air, which is very helpful for IT administrators: you won't have to go collect every iPhone that needs that feature. E-mail, contacts, and calendar are automatically pushed from your desktop to your iPhone upon setup. As far as I understand, many devices, such as my Treo and BlackBerrys, also offer over-the-air setup; it's almost a requirement in the IT world.

Phil Schiller takes the stage.
Corinne Schulze

10:14 a.m.: Apple appears to have packed the auditorium with employees, who are very enthusiastically applauding every successful demonstration of a new feature. Either that, or the press corps is really, really excited.

10:16 a.m.: Schiller demonstrates the remote-wiping feature, which appears to disable the iPhone. That part went really quickly. I'll try to figure out later what, exactly, happens when you "remote-wipe" an iPhone.

10:18 a.m.: "These are the features customers have asked for to make the iPhone a big hit in businesses, universities," and other places around the world, Schiller said. "Now it's addressing the needs of the enterprise as well. That's it for the enterprise features; now Scott Forstall will address the SDK.

10:20 a.m.: "I'm here to tell you about how developers can build great applications for the iPhone," Forstall said. He starts off, however, with the Web applications, which Apple initially said presented the best way to build applications for the iPhone back at its developer conference last June. Developers were less than enthused, but it's true that these days, you can build lots of interesting Web applications that don't require native access to the computer. Scott singles out Facebook and Bank of America, saying the iPhone accounts for 25 percent of all mobile online banking for BofA.

10:21 a.m.: "Starting today, we're opening up the same native APIs and tools that we use internally to build all our iPhone applications." It's the same SDK used by Apple to build iPhone applications, especially the APIs. APIs, or application-programming interfaces, enable applications to talk to the underlying hardware and operating system.

10:22 a.m.: The iPhone's OS uses the bottom three layers of the Mac OS X software stack, the core OS, the core services, and the media layer. That's what was included in the first releases. But Cocoa, the application-programming framework, required a little tweaking to work with the touch-screen interface. Hence Cocoa Touch, the unique programming interface for the iPhone.

10:24 a.m.: The iPhone's OS X uses the same OS X kernel as Mac OS X, optimized for a mobile experience. The networking layer is also the same, as well as the power management techniques used for Apple's notebooks. It's a little more sophisticated, however, as OS X uses something called "automatic power management" to regulate the power demanded by the iPhone's software.

10:26 a.m.: Software development is a little outside my normal comfort zone (I've been more of a hardware guy) but we're getting a deep dive into the iPhone's OS X, which Apple has never done before in public. The Core Services layer is next on Forstall's list. It also uses several of the regular Mac OS X features, which you can also get from the Media Layer. We're talking about things like Core Audio, but Apple also built things like OpenAL, designed to deliver "three-dimensional" sound for games.

10:28 a.m.: Cocoa Touch is totally unique. Apple built unique multitouch controls and also needed to program a way to access the accelerometer. Developers will have access to the accelerometer, which will be a delight for game developers. "We think we're years ahead of any other platform for mobile devices," Forstall said.

10:30 a.m.: So how exactly is this development going to work? Forstall starts talking about Xcode, the development environment for Mac OS X. That works here too, giving developers tools to write and manage code developed for the iPhone. It seems, at least at this point, that iPhone development will be very familiar to anyone who has developed applications for the Mac.

The iPhone simulator.
Corinne Schulze/CNET Networks

10:32 a.m.: You'll have to have a user interface for your application, and Apple has created something called Interface Builder. A drag-and-drop feature for the development environment can help you build the application's look and feel. It supports language localization, as well.

10:33 a.m.: The next feature of the SDK is Instruments. This allows you to record the performance of an iPhone application on a Mac, when the iPhone is physically connected to the Mac. This would give developers the ability to "visually compare" the performance of different parts of an application, looking for weak spots or overpowering segments.

10:34 a.m.: Xcode, Interface Builder, and Instruments are all Mac development tools enhanced for the iPhone. But Apple has also created an iPhone simulator, which means that you can run the iPhone application on a Mac in the simulator, so you can get a sense for how the application will perform, as well as catch coding errors.

10:37 a.m.: Forstall demos the native application development process on a Mac. It's basically like an iPhone superimposed on the desktop, so you can mimic the iPhone experience on the Mac. Scott starts building a new project from scratch, a simple program called "Hello, World," a common Programming 101 exercise.

10:41 a.m.: Another more complicated application called Touch FX is being demonstrated. It's sort of like adding Photo Booth-style effects to a photo using your finger on the iPhone touch screen. Pinch or tap to introduce fun house mirror-style effects. Want to erase your doodlings? Shake the phone. Developers can treat the accelerometer like a button.

An application made so that you can use the touch screen to manipulate people's faces. You can erase the manipulations by shaking the phone.
Corinne Schulze/CNET Networks

10:43 a.m.:Touch Fighter is the first official game for the iPhone, developed by Apple engineers. It uses OpenGL. You're flying a Star Wars X-Fighter through space, steering by using the iPhone like a pretend control wheel, with both hands on the side. Drop your left hand to turn left, like you're driving a car. This is pretty slick stuff. The accelerometer opens up all kinds of development possibilities, which is a necessity because there are no physical buttons on the iPhone.

A gaming application that is motion-sensitive. Your iPhone is the controller.
Corinne Schulze/CNET Networks

10:44 a.m.: You can record a test of the application on your Mac, allowing you to reproduce application behavior to make sure that it works. This took Apple two weeks and fewer than 10,000 lines of code, Forstall says.

10:46 a.m.: Apple invited in some third-party developers a few weeks ago to start playing with the iPhone SDK, to see what other developers could do with the technology in two weeks. Electronic Arts' Travis Boatman, vice president of worldwide studios at EA Mobile, gets on stage to demonstrate the game developer's application, which, believe it or not, is a mobile version of Spore.

10:49 a.m.:Spore is a game in which you basically try to make it from a molecule at the bottom of the ocean to an organism on top of the water. Check out my colleague Daniel Terdiman's coverage of Spore for more details. You can sort of create your own organism, moving eyes and other features around with the touch-screen interface. EA says it could have done a lot more with more time, but I have to admit, that's a pretty impressive feat.

10:50 a.m.: I guess we're not totally done with the business stuff: Salesforce.com is next. Chuck Dietrich of Salesforce comes on stage to demonstrate what his company did.

10:53 a.m.: Salesforce created an application for the iPhone that does more than you can do with its Web-based business management application. For instance, it can talk to Maps to plot directions to your next appointment, figure out how many more widgets you need to sell to make your quota, and lots of other stuff. Salesforce did this with one person in fewer than two weeks.

10:54 a.m.: AOL is next. Rizwan Sattar will demonstrate what AOL has done in two weeks: AIM for iPhone.

10:56 a.m.: Fire up AIM for iPhone, and you get a buddy list. This was Sattar's first experience developing for a Mac, and he built the buddy list interface in five days. A simple conversation is easy enough, but most of us maintain multiple IM conversations. You can switch between conversations with a swipe of the finger, as if you're scrolling through photos on the iPhone. You can also upload photos from your iPhone to serve as your buddy icon.

AIM for iPhone.
Corinne Schulze/CNET Networks

10:59 a.m.: Epocrates is the next showcase developer, making software for medical professionals. Glenn Keighley shows off what it's created. Keighley's been a mobile developer for a while, but he says the iPhone development was almost like developing for a desktop. The company was able to build a native application that can access an SQL database for accessing medical information, pictures of pills, and checking whether a new prescription will have an adverse effect on a patient who is already taking a bunch of other drugs.

11:02 a.m.: Sega is the last developer brought in early to play with the SDK. Ethan Einhorn is Sega's representative, and he shows off Super Monkey Ball. It's sort of like a skiing game, where you hurtle down a ramp trying to get bananas and such. It uses the accelerometer for control, just like the Apple-designed game. Sega actually found that it had to upgrade the graphics from the console version so the application would look better on the iPhone.

11:03 a.m.: So, how do those applications get on the iPhone? Jobs is going to handle that one.

11:05 a.m.: Developers want to get their applications in front of every iPhone user, Jobs says. He says that's a difficult task, but Apple's got a solution: the App Store. This is an Apple-developed application designed for the iPhone to distribute applications directly to the iPhone. This is not what previous reports suggested--that iTunes would be the one-stop shopping mall for iPhone applications.

11:05 a.m.: The App Store is built into the iPhone, so you can search applications by popularity, title, or genre of application, sort of like in the Wi-Fi Music Store. The applications are wirelessly downloaded to the iPhone over either EDGE or Wi-Fi. That's much, much easier than was rumored.

The App Store is built into the iPhone.
Corinne Schulze

11:07 a.m.: Of course, this will also be in iTunes. "But we think most people are probably going to use their iPhone and just do it over the air to their iPhone," Jobs says. The App Store will prompt iPhone users if a new version of the application is released, and it will wirelessly download the application. This, however, will be the exclusive way to distribute iPhone applications.

11:08 a.m.: The developer picks the price of his or her application. The developer gets 70 percent of the revenue off the top; Apple gets 30 percent. No credit card, hosting, or marketing fees. The revenues are paid monthly, and Jobs calls it "the best deal going." There is no charge to the developer if you want to make a free application.

11:09 a.m.: "Will there be limitations?" Jobs asked. "Of course." Sorry, pervs. Jobs says no iPhone porn. He doesn't bring up any other limitations, however, leaving a little bit of wiggle room on what will be approved.

11:10 a.m.: You'll get all this stuff through the 2.0 software update. That delivers the SDK and the enterprise capabilities, and a beta test version is going to be released today. It will ship officially in late June, and it's a free software update.

11:11 a.m.: The same software release will run on the iPod Touch. All the games and applications will run on that, and the enterprise features are different. Jobs confirms that the accounting policies for the iPod Touch are different, and so Apple plans to charge for that software update. In January, Apple charged $19.99 for an iPod Touch software update.

11:11 a.m.: Want to be a developer? Download the iPhone SDK for free. Macs only. There's also going to be an iPhone developer program, which allows you to test your code, get tech support, and distribute your applications. That costs $99.

11:15 a.m.: Today, KPCB is announcing the iFund for the iPhone platform. Presumably, the investment firm cleared that name with Apple's legal department. Doerr is going to put $100 million into the iFund, which should be enough to start "about four Googles," he jokes.

KPCB has created the $100 million iFund for the iPhone platform.
Corinne Schulze/CNET Networks

11:17 a.m.: "Today, we're witnessing history--the creation of the third great platform," Doerr says, referring to Apple's other businesses, the Mac and iPod. "It's bigger than the personal computer." Matt Murphy and Bill Joy, among others, will be involved in the iFund. "If you want to invent the future, the iFund wants to help you build it."

11:18 a.m.: Jobs closes the official event. The press is being invited to stick around for a few minutes to ask some questions, so we'll hang out a while longer.

11:23 a.m.Q: What does the $100 million do for the iFund community?
A: Jobs says you should go ask them, referring to the iFund's financial backers. "We're not sending them a message; we're sending customers and developers a message. The iPhone has been out for less than a year. This stuff is going to be shipping right around a year."

11:26 a.m.Q: What sort of safeguards did you use to make sure the applications will be secure?
A: This is a big concern, Jobs says. "We've tried to strike a really good path here. On one side, you've got a closed device like the iPhone, and on the other side, you've got a Windows PC, where people spend a lot of time just getting it up to speed." Apple has done that through a developer registration program, which is mandatory. Apple is using the electronic-certificate method, in which developers can be tracked when they release an application. If it's a malicious one, Apple can "shut off the spigot," if need be, turning off the App Store.

11:28 a.m.Q: How likely do you think it is that a VoIP application will be developed?
A: "The initial take is that we will only limit VoIP over the cellular net, but not over the Wi-Fi network." That might change, Jobs says. But for now, no VoIP over AT&T's EDGE, which makes sense.

11:30 a.m.Q: Doesn't the fact that Apple is going to be the exclusive distributor for the applications raise questions of monopoly? What if developers don't want to work with Apple?
A: "Then they won't get their application on the iPhone." Jobs thinks people will want to do it their way at first, and developers will be happy to piggyback on Apple's brand and distribution method. "We don't intend to make money off the App Store," Jobs says, comparing it to the iTunes Music Store.

Scott Forstall, Steve Jobs and Phil Schiller take questions from the press following the address.
Corinne Schulze/CNET Networks

11:32 a.m.Q: Will SIM or carrier-unlocking software that makes the iPhone usable on carriers other than the one it's released with be excluded from the App Store?
A: Yes.

11:34 a.m.Q: How much will the upgrade cost for the iPod Touch, and will you have to change the accounting treatment?
A: Jobs goes through the accounting treatment again. Apple recognizes the iPhone revenue over two years, but the iPod Touch revenue is all recognized up front. That means that Apple has to assign a value to major upgrades, such as the 2.0 software. Jobs says the cost of the iPod Touch upgrade won't be revealed until the update is ready to ship in June, but "we're not trying to make money off this."

11:37 a.m.: A question about IT policies sets off some more RIM bashing, with respect to the NOC and the outages that have crept up in the past. Jobs notes that this is "a single point of failure" but also that there are security implications of having the e-mail go through a central space.

11:37 a.m.Q: Is this an international rollout?
A: Yes.

11:40 a.m.: Forstall brings up that parental controls will be released with the 2.0 software update, so parents can prevent YouTube or Safari from being used.

11:41 a.m.Q: What made you change your mind from last year, and how are the apps going to be managed in the store? Will there be a waiting period?
A: "Well, we all at Apple change our minds from time to time, but I don't know what you're talking about." He's reminded of the Web app decision presented last June, and he notes that "developers gave us feedback that they wanted to do a lot more. Creating an SDK is a lot of work; once you give it to developers, you want to (be able to) live with it for the next 20 years."

11:44 a.m.Q: What is the relationship with the carrier? Up until now, applications have been released through the carrier.
A: "We have great relationships with our carriers, and we struck a new relationship with our carriers, where Apple is responsible for the software on the phone," Jobs says. It doesn't sound as if the carriers will get a piece of the revenue from iPhone applications.

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11:45 a.m.Q: Do you have any plans for letting developers interface with dock-connected accessories?
A: Forstall fields this one. "In iPhone 2.0, there will not be APIs for developers to talk to dock-connected devices." It's basically going to be the same as the Made for iPod program.

11:47 a.m.: That's it. Apple has unveiled its plan for iPhone applications, and it's actually a bit more permissible than some might have thought earlier this week. As expected, the company will control distribution and use an electronic-signature method, but it sounds as if far more types of applications than thought will be permitted. The devil, of course, is in those details, and that will become more apparent as developers get a chance to play with the SDK. Thanks for reading our live coverage. We'll follow up later in the day with more on the iPhone SDK, which is due out in late June, and the new enterprise features.

About the author

Tom Krazit writes about the ever-expanding world of Google, as the most prominent company on the Internet defends its search juggernaut while expanding into nearly anything it thinks possible. He has previously written about Apple, the traditional PC industry, and chip companies. E-mail Tom.
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